The thing that really grinds my gears is that they sell cars in certain specs which have the hardware for something, but you can't use it without paying extra. Like....you can buy one which physically does have heated seats, but you can't use them unless you pay for the option. I just wonder if wiring in a physical switch to turn on the heating is considered piracy?

Try buying an oscilloscope - the difference between a $3,000 scope and an $8,000 scope is often just a few software toggles.

It's annoying if your hardware has features that you can't access, but it's more annoying if you don't have hardware at all because you can't afford the entry-level model. Disabling features allows a manufacturer to offer a broad range of products at a broad range of prices without sacrificing economies of scale, especially when there are large NRE costs to recoup.

This strategy can lower costs for the manufacturer because there are fewer variants of the product to make. I support this in the hope that cost savings are passed on to consumers.

And I don't support this at all. These cars cost an absolute fortune(Model 3 is worth like 4 years of average salary where I'm from) and the thought that it could be delivered with some hardware that isn't functional purely because you haven't paid extra for the switch is mindboggling.

You could make the same argument about houses - imagine how much cheaper it would be if every house was built out of prefabricates, but you just had to pay extra to get the additional rooms! What arrives from the house factory has 2 bathrooms, but one is sealed shut unless you pay the fee! But that's all fine, as long as the customer can save some money?

We can already see what happens with this approach taken to the extreme - look at BMW and CarPlay. Instead of selling it as an add-on from factory for say $300, you can pay yearly to have it - about $50. And BMW says "this is great, it's saving the customers money! Average car owner has the car for 3-4 years, so they will pay less in the yearly subscription than they would have done in a one-off fee! Isn't that great for everyone?". That's nuts. Absolutely positively nuts. To extend that to heated seats - I can easily imagine some company making those things available as a pay-pass, where you pay say $0.99 to have the seats available for a day. Again, someone will say "that's fantastic! It's cheaper than paying for those seats as an option from factory, if you don't need them you don't actually pay anything!". It's absolute madness and we're encouraging this.

Although it's true that cars switch owners, cars usually stay on the road for 10-15 years so consumers with the annual fee will pay out more in the long run.

After working with Toyota in their multimedia and head unit design facility, I can see why car companies would switch from a set price of $300 to a yearly fee. It used to be that you just included a FM radio and a CD player and the driver was good to go. Now, these head units need updates every month. These updates mostly include compatibility with the latest IOS/Android, latest phone hardware, newer versions of Pandora/Spotify/iHeartRadio because people wanted to "thumbs up" their songs, newer versions of the HU OS because these new music app versions broke the old OS, newer maps and less embarrassingly-bad voice recognition. Behind these map updates, there's some tester with an H1B Visa getting paid a salary to drive around in a Sienna to take photos of discrepancies between the map and the actual road. Once you see this, it's easy to understand the switch to an annual fee. However, the largest cost comes from trying to connect to the latest phones to use their 3G/4G.

If Tesla wasn't hemorrhaging out money, I'd also wish Tesla had a cheaper car. But Tesla unsustainably lost $702 million last quarter and they need to make enough of a profit to pay back all of their debt and invest in building our future; otherwise they'll go bankrupt. The list of successful car company startups is short. As of 2016, the number of American car companies that haven't gone bankrupt is a grand total of two: Ford and Tesla. Starting a car company is idiotic and an electric car company is idiocy squared. Tesla's end goal is to make an affordable sports car, just as the Ford Model T was an affordable car for the masses that brought Ford from 9% market share to 61% market share. They just can't bring the costs down yet while they are hemorrhaging so much money.

Further reading: 1) https://www.tesla.com/blog/secret-tesla-motors-master-plan-j... 2) https://www.tesla.com/blog/master-plan-part-deux

> I just wonder if wiring in a physical switch to turn on the heating is considered piracy?

It's not piracy, but Tesla can (hypothetically) decide to prevent your car from turning on if they find out what you're doing.

On the surface I think it really pricks you but it would be like buying an iPhone and wondering why you have to pay for a song subscription when the phone has the hardware to play them.

IMHO this falls into two buckets for Tesla that both align with the vision:

a) You pay a one time software cost then benefit from cloud updates for the lifetime of the car. Those aren't free for Tesla to do, on any level. Would it be nice if you could opt out? Maybe but this isn't about _you_. It's about driving a technological change which you may benefit from. Buying a specially built car without those would likely be _more_ expensive than just offering one with the features switched off. So if it pleases you to pay 10k USD (made up number) _more_ for a car that you can never upgrade just so you aren't offended by software you can't use then....sure?

b) In terms of their mission in benefits them to operate in this way. It's a quiet spur to other manufactures who aside from Nissan don't seem to quite get. Tesla has shown that you can build a $35K USD car that competes with everything and cast a lower cost of ownership over 5 years than a Prius. I remember early discussions coming out of VW that convinced them to go all in. Quite simply that said, wait - if the base Model 3 has a theoretical cost of 35k and that some non-trivial percentage of that is autonomous hardware, redundant and constant cellular communication, an over top the drive train to handle a 3.5 second 0-60 launch, and a bunch of tech goodies then we can make a 20k car that's mechanically just as good with all the bells and whistles of a modern sedan...just wont't be a futuristic space car.

This is more common than you think. The CPU in your computer might have more good cores than you are allowed to use for example. You paid for 4 cores? You get 4 cores, but your chip might actually have 8 good cores, just locked because you didn't pay more.

My understanding is they test all the CPUs and differentiate them by the test results - you might have four of eight cores sitting there unused that are fine most of the time but have some weird edge case, so they disable the four for QC purposes and sell it as a lower end processor. It's not quite the same as locking them down just to sell them as a lower end unit, they'd rather it worked perfectly and sell it at the higher end.

Unless you're talking about Intel's "upgradeable" processors [1] which you could pay more to unlock performance (but that was unlocking more L1 cache, not cores AFAIK)

[1] https://www.extremetech.com/computing/83896-intel-offering-c...

Sort of. They definitely perform this sort of binning, but the demand of the parts in the market and the success rates are things they have to estimate beforehand.

If they'd run out of the higher-end binned parts, they have sold out. But if they run out of the lower-end binned parts, they just relabel the higher-end parts and keep selling both lines.

Yield also isn't constant, so odds are the number of parts binned higher goes up over time as well.

They eventually figure out their yield issues. Do they then abandon the low-end market? Of course not.

I came across backup appliances recently that work on this principal. They literally have TBs of unused disk space in the box in my datacenter, but require an additional license to activate. It makes me very angry!

Why does it make you angry? The price of the appliance would likely be the same if that spare capacity was not pre-installed, and the cost of an upgrade would likely not change if hardware was delivered when the upgrade was purchased instead of being pre-installed.

They have calculated that enough customers will upgrade to pay for the hardware installed in the customer appliances that don't.

What's wrong with that? You don't have to wait for the hardware if you buy the upgrade.

It's a false scarcity that's annoying to the customer. Unlocking the extra capacity costs the vendor nothing. The consumer has paid enough money to have access to that storage without hurting the vendor, but the vendor refuses to grant access to that storage capacity.

If I had purchased such a product it would leave a sour taste in my mouth. The next time I needed such a piece of equipment I would try to find an alternative source.

Here's an analogy. If I'd purchased a box lunch of a juice box, sandwich and chips, but surprisingly they also included a cookie that is in a special package which will only unlock if I pay another $1 I would be upset. Of course, I could just throw the cookie away, package and all. I may not want the cookie anyway. But that's so wasteful! The vendor can afford to include the cookie at the price I already paid, but is solely using that cookie as a way to extract more money from me. It's wasteful.

What if the alternative is to not offer the cheaper product at all. Would that be preferable?

It does seem like a weird system.

>What if the alternative is to not offer the cheaper product at all.

The alternative that's been around for centuries is called "having a sale".

Say, you make 1000 units of something. Each unit costs X to make. You need to make Y profit per unit to sustain your business.

The bad news is, not everyone wants to pay X+Y. The good news: some are willing to pay more. The supply-demand curve thing.

So what you can do is: sell 500 units at X+2Y. Then have limited-time sales throughout <time period> at X+0.1Y.

This way, you never lose money on a sale, and you make the money you wanted to make. The customers that want your product here and now* pay for that premium. The customers that need your product will pay up as well, as sales aren't a guaranteed thing. And the rest will wait.

With smart hardware, someone had a genius idea: have the same breakdown in prices, but also cripple the products you sell at a lower price. Make your money faster by selling at both price points simultaneously.

Nothing* wrong with trying to do that (from the seller's side).

Nothing wrong with being disgusted with the wasteful practice it and calling it out (from the customer's side).

* aside from the waste aspect, repair aspect, customer hostility, artificially high margins probably being result of a monopoly/lock-in/supplier scarcity, and a plethora of other things.

The vendor is not only requiring you to pay for the physical goods you already have, but your payment is subsidizing the waste of the other consumers not purchasing the option. I pay for mine, and I pay for their unused resources. Most artificial tiering in unethical.

I think a more apt analogy would be those hand trucks that come on U-Hauls, where it's already physically on the truck, but just sealed up unless you pay a little extra.

So if you don't buy the option it's not destroyed forever, but can be utilized by future users once you move on. This allows them to provide customers with instant access to extra value by charging them enough to support putting a sealed hand truck on every U-Haul, or extra terabytes in every account.

It's probably a matter of time before someone starts jailbreaking teslas, turning off the phoning home, turning on heated seats, etc.

already been done, RichRebuilds talks about it on the show he did with Joe Rogan and he's talked about it on videos as well.